National Institutions and African Development: Evidence from Partitioned Ethnicities
AbstractWe investigate the role of national institutions on regional development in a novel framework. We exploit the fact that the arbitrary political boundaries in the eve of African independence partitioned more than two hundred ethnic groups across different countries subjecting similar cultures, residing in homogeneous geographic areas, to different formal institutions. Using both a matching-type and a regression discontinuity approach we show that differences in countrywide institutional structures across the national border do not explain within-ethnicity differences in economic performance, as captured by satellite light density at night. Despite some evidence of heterogeneity, for the overwhelming majority of groups the relationship is economically and statistically insignificant. While our results do not necessarily generalize to areas far from the national borders, close to the capital cities or to other parts of the world, they suggest that the cross-country positive correlation between formal national institutions and economic development has to be carefully interpreted.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9075.
Date of creation: Aug 2012
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Find related papers by JEL classification:
- N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- Z10 - Other Special Topics - - Cultural Economics - - - General
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